The State of Solar: Insights on Distributed Solar Installations in Minnesota

Local governments are setting aggressive climate and clean energy goals in Minnesota. Encouraging distributed solar energy will play a key role in meeting them. The Great Plains Institute (GPI) has conducted an analysis of Minnesota Public Utilities Commission data on where and what types of distributed solar installations are occurring in the state. This analysis can help decision makers understand solar deployment trends in Minnesota from the past two decades. The study also identifies top ten lists for cities leading in distributed solar installations and solar capacity.

Utilities are required to report solar installations to the Minnesota Public Utilities Commission. The data used in our analysis is through early 2022 and focuses on distributed solar rather than utility-scale solar. Distributed solar is any solar energy generated on or near the site in which it will be used, which includes community solar gardens as well as commercial and rooftop installations. Our initial analysis of this report focused on data through early 2021, but we have updated some of our analysis to include MN Public Utilities Commission Distributed Energy Resources (DER) Reports through 2022. GPI plans to conduct further analysis as more data is released.

GPI analyzed this data for solar installation trends in Minnesota to identify which communities have the most solar deployment. This analysis highlights key metrics of solar growth for Minnesota’s communities and identifies the trajectory of different types of solar development.

Here are some key takeaways from our analysis:

Residential solar is the fastest-growing distributed solar installation type (by number of installations).
As of early 2021, the Twin Cities metropolitan area was home to more than half of all distributed solar installations, but only about a quarter of the state’s distributed solar capacity.
After normalizing for city size (per capita capacity), smaller cities frequently show a greater amount of distributed solar deployment than larger cities.

Distributed solar over the years

Total solar capacity showed minimal growth from the late 1990s through the early 2000s. In 2007, Minnesota hit the milestone of 1 megawatt (MW) installed solar capacity. In 2013, the state passed legislation requiring Xcel Energy to create a community solar garden program. The implementation of this statute resulted in a sharp upward trajectory of distributed solar capacity in 2016.

By early 2023, Minnesota had 22,996 distributed solar installations in the state, with more than half located in the seven-county Twin Cities metropolitan area.

Figure 1. Cumulative distributed solar capacity in Minnesota (2002-2023)

Based on data from the Minnesota Public Utilities Commission’s Annual Distributed Energy Resources (DER) Reports, including utility-reported DERs through December 31, 2022, and released on July 26, 2023.

Distributed solar installations by utility

Data from the Minnesota Public Utilities Commission identifies both the city closest to the solar installation and the utility service territory where the installation is located.

Xcel Energy is the utility with the most distributed solar out of more than 100 utilities in Minnesota:

Xcel Energy supplied 986 MW of distributed solar; Connexus Energy supplied the second-largest amount with 14 MW of distributed solar
Overall, Xcel Energy provided 93 percent of the state’s distributed solar capacity and 67 percent of total installations

Xcel Energy, Minnesota Power, and Otter Tail Power all have additional utility-scale installations that were not considered in this analysis.

Distributed solar installations by type

GPI’s analysis focused on three main customer types:

Residential
Commercial
Community solar gardens (CSG)

As defined by Clean Energy Resource Teams, a CSG is a solar photovoltaic (PV) system that produces solar electricity for participating subscribers. Rather than directly installing panels on their roof, subscribers purchase a share of the solar garden and receive credits on their utility bill from the electricity generated by their share.

Most distributed solar installations are residential, and the annual growth rate for residential installations has continued to accelerate. Minnesota saw an addition of more than 2,000 new residential installations in 2020. Early 2021 data saw a continuation of that growth. In contrast, the growth rate for commercial and CSG installations appears to be leveling or even falling. For instance, the annual growth rate for CSGs hit its peak in 2017.

Figure 2. Distributed solar installations added each year in Minnesota (2007-2023)

However, when looking at solar capacity broken down by customer type, most of the state’s distributed solar energy production comes from CSGs. The capacity of the solar installations dictates how much energy will be produced.

By the end of 2020, CSGs totaled 784 MW of capacity, while residential only had 71 MW and commercial 87 MW. According to the Minnesota Department of Commerce Division of Energy Resources, utility-scale solar capacity, not included in this analysis, totaled 308 MW in 2020.

Figure 3. Cumulative distributed solar capacity over the years in Minnesota (2007-2023)

Distributed solar by city

Which city is leading distributed solar deployment in Minnesota? The data show several surprising trends and community success stories for solar deployment. Editor’s note: this data is from the latest available DER Report released on July 15, 2021.

Figure 4 shows an unsurprising result, with the most populous cities being leaders in distributed solar installations. Minneapolis and Saint Paul have the most distributed solar installations. Bloomington, the fourth most populous city, is lower on the list, falling behind several significantly smaller cities.

Figure 4. Top 10 cities in Minnesota by total number of distributed solar installations

However, when looking at the top ten cities leading in distributed solar capacity, a much different list appears. This data indicates that cities with the most solar installations are often home to small-scale solar, such as residential units that typically range from 4 kW to 10 kW.

Statewide, when considering residential, commercial, and CSG installations, we see an average of 89 kW per installation. However, this average decreases to 42 kW per installation in the metropolitan area. Smaller installations make sense for dense metropolitan cities, such as Minneapolis and Saint Paul, where there is less opportunity to install large CSGs that typically output 1 MW (1,000 kW).

Figure 5 shows that Northfield and Saint Cloud occupy the top two spots for the greatest distributed solar capacity in cities (considering only residential, commercial, and CSG installations). These surprising results can be attributed to the dominating effect of CSGs.

It must be noted that for many of these cities, the CSG installations included in the data are not technically within the city geographic boundary but lie within unincorporated areas near the city. The data do not identify which CSGs are in unincorporated areas.

Figure 5. Top 10 cities in Minnesota by total distributed solar capacity

When CSGs are removed from the data to consider only residential and commercial installations, Minneapolis and Saint Paul are once again in the top five cities for installed distributed solar capacity. For some rural communities, a single large commercial installation can significantly affect the total capacity rankings.

Figure 6. Top 10 cities in Minnesota without community solar gardens by total distributed solar capacity

Conclusion

The data from the past two decades highlights the growth of distributed solar deployment in Minnesota. While larger cities host a greater number of distributed solar installations, perhaps surprising is that smaller communities are adding solar capacity at the same—or even a faster—rate as larger communities on a per capita basis. This can be attributed to the effect of CSGs.

Of the three main distributed solar types, CSGs have the greatest amount of distributed solar capacity and represent a key contributor in helping the state reach its 100 percent clean electricity by 2040 goal. Nationally, Minnesota ranks in the top three states for total installed community solar capacity.

There are many opportunities for Minnesota to continue expanding solar across the state. The National Clean Investment Fund and the Greenhouse Gas Reduction Fund from the US Environmental Protection Agency (EPA) will award competitive grants to states, tribes, and municipalities to help spur the deployment of residential rooftop solar, community solar, and associated storage and upgrades in low-income and disadvantaged communities.

With fewer financial barriers to developing distributed solar energy projects, local governments can serve the energy needs of their communities while making significant strides toward regional and statewide renewable energy goals.

With questions or for more information on the analysis, please contact Monika Vadali at [email protected].